Management Strategies in Biology and the Economy

Given that people have tried to manage biological species, ecosystems, and biomes without sparkling success, it is doubtless likely that it will be equally difficult to manage lucrespecies, econosystems and economes. At the same time, it would be incorrect to suggest that all efforts to manage biological systems at some level have been total failures. A better description would probably be to suggest it is possible to influence biological systems.

Early attempts to manage wild animal species for improved and yet sustained harvest made the assumption that in most animals there is a overabundance of young. The best mathematical treatment of this was developed in Canada by Bill Ricker in 1954 (“Stock and recruitment,” J. Fisheries Res. Board Can., 11, 559-623). His model was simple in concept and elegantly easy to implement. I have simplified it immensely but in essences it goes like this. Each animal in a stable system needs to replace itself in its lifetime. All animals produce more young than is necessary to replace themselves. If the environment has more carrying capacity that the fish are using, the population grows. If the population is stable, the number of young surviving to adulthood equals the number of adults in the population. By harvesting adults, we can cause the population to increase the rate of survival to adulthood. By harvesting only the equivalent of the excess young, we can take the “maximum sustainable yield.” This was too aggressive and over the years, the regulations shifted to “optimum sustainable yield”, then this was too aggressive so they shifted to regulating the harvest based on the previous harvests and their trends. Ricker recognized the limitations of the idea, and made these comments: “Plotting net reproduction (reproductive potential of the adults obtained) against the density of stock which produced them, for a number of fish and invertebrate populations, gives a domed curve whose apex lies above the line representing replacement reproduction. At stock densities beyond the apex, reproduction declines either gradually or abruptly. This decline gives a population a tendency to oscillate in numbers; however, the oscillations are damped, not permanent, unless reproduction decreases quite rapidly and there is not too much mixing of generations in the breeding population. Removal of part of the adult stock reduces the amplitude of oscillations that may be in progress and, up to a point, increases reproduction.” This assumes a constant carrying capacity.


Although it is a theoretical model, it is designed to capture the common features of many experimentally determined reproduction curves. It succeeds in providing a quantitative possibility of oscillations that are observed in fish populations. The model does not reflect the outside influences on the fish populations, such as man-made impediments, pollution, or random environmental variations, all of which influence the carrying capacity of the environment. A glance at Canada’s fishery record is not encouraging. The most abundant species in the harvest today are down to population levels in the wild as low as less than 1% with most hovering around 10% of their former levels. Several species are now banned from the harvest until there is evidence of a reasonable recovery. The picture is not dissimilar on a world scale and not dissimilar for terrestrial animals harvested commercially by hunting. Both subsistence and sport hunting can show better results but the harvest rates are of course much lower.

The problem with all of these methods is that the regulation focused on the species, not on the system within which the species exists. A few attempts are now being made to manage harvest rates by examining the entire ecosystem within which the harvest occurs. By noticing trends in prey species or other indicator species, it is sometimes possible to anticipate some years in advance when and how a problem will arise, so the harvest rates can be adjusted to fit these predictions.

With these management examples, there is a mixture of being inside and outside the managed system. Fishermen with their individual strategies were of course inside the system and not necessarily robotic in their adherence to the intended result of regulations. They also found ways to adapt to the regulations (equivalent of competitive factors in an natural ecosystem) because of course the fishermen were simply adding fishing mortality to the natural mortality. As a predator within the system, they logically and naturally searched for ways to maximize their harvest.

Another example of managing a species within an ecosystem is the injection of an exotic species. Often these are introduced with good intentions but if the species can adapt to its new surroundings, it often will become very abundant, sometimes to the extent that it wipes out many of the naturally occurring species by out-competing them for limiting resources. The exotics usually have no or very few predators that can bring their numbers down. The ecosystem becomes very unstable. In some instances managers have introduced more exotic species to prey on the first exotic. The usual result is not what was expected because the second exotic finds easier prey in the naturally occurring forms. And now the system has two species that are out of control and gaining rapidly in population and control of the resources of the ecosystem.

So managing a species within a system doesn’t work unless the entire system is considered and then all the manager can do is adapt the added harvest mortality to the behaviour of the whole system, not just to the behaviour of the species to be managed. Introducing exotic species for whatever reason, is almost never a good idea. The results range from incompatibility to rampant overtaking of the system and its natural elements.

In the description of the evolution of the economy so we could see the interrelationships, I posited that groups of entrepreneurs or corporations represent the equivalent of species that I called lucrespecies. As one of the groups of species acting to recycle the wealth and waste materials, I noted that the government is responsible in part for that role. The key aspect is recycling wealth. This takes place in all forms of economic systems, where the ruler or the state uses part of the productivity to protect the state, to build infrastructure, and to enforce internal laws at a minimum. It takes no intuitive leap to immediately recognize government taxation or outright control of the revenue as a means of removing the excess and putting it to other uses, such as health, education, social programs, culture, etc. If for a moment we consider that the government itself (and presumably the members of the government) do not have immediate pecuniary gain to be made from collecting taxes, granting extra power for taxation is similar to harvesting excess production in a fisheries stock.

One could presume that similar models to Bill Ricker’s maximum sustainable yield and the subsequent models have already been developed in financial expert literature to ensure that the taxation harvest does not exceed the replacement levels of the naturally operating econosystem. There is such a model, called the Laffer Curve. And interestingly enough, it is essentially identical in form to the Ricker curve. Another theoretical approach is the “Optimal Tax” model (sound familiar — optimum sustainable yield). Optimal taxation describes how taxes can be structured to give the least deadweight costs, or to give the best outcomes in terms of social welfare. In practice however, this is only really used in democracies and there politicians tend to focus the excess on ensuring re-election not welfare. This results in a familiar overall tax system where the tax rates are lower for the most powerful groups of society, instead of being the lowest for the poorest.

It is very difficult to be inside a system and examine it as if we were outside of it. Government is in the best position to do this, but because the members of governments have internally vested interests (re-election and perhaps corrupt self-interests), the needed objectivity is not maintained. Nonetheless, most taxation levels are determined by a mix of ideology and practical reactions from the entrepreneurs and the people who are employees or for various reasons unemployed and needing assistance. This is very similar in practice to the current fisheries and wildlife management techniques of using an overarching harvest ideology, “feeling” the pulse of the system, and reacting accordingly.

What about attempting to manage an entire ecosystem to establish a dynamic balance different from the current observed situation? I will comment on that idea in another blog and feature the tragic attempts by Hayek, Friedman, and the Chicago School to build and test a model for the economy based on a fundamental lack of understanding of the principles of evolution. This has unnecessarily led to the deaths of many people and casting many others into poverty and very low levels of income. The danger of further misadventures in attempting to implement this flawed model is facing us today as the ideology of Friedman-style free-market economy still is high in the views of many influential people. We will examine the possibility of replacing it with a model that corrects Locke’s omission and Friedman’s errors at the same time and ultimately better models the observed results in real life.

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